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Sunday, 26 July 2015

“We believe that the probability of default is approaching 100 percent, and that losses given default are substantial,” Moody’s wrote on Wednesday about Puerto Rico’s $72 billion in bonds that were stuffed into numerous conservative-sounding bond funds spread across America’s retirement portfolios. “Bondholder recoveries will be lowest on securities lacking explicit contractual or other legal protections,” the report went on, according to Bloomberg.About $26 billion in bonds fall into this category, issued by entities such as the Government Development Bank, Highways and Transportation Authority, Infrastructure Finance Authority, and Municipal Finance Authority.

Investors in these bonds might recover only 35 cents on the dollar.

Recovery rates for bonds with stronger investor protections, such as general obligation bonds, would likely range from 65% to 80%, Moody’s said.

But those recovery rates, as dire as they seem, only apply if you own the bonds outright. If you own those bonds in a bond fund, the scenario may look much, much worse, according to what UBS just did.

Turns out, some of these bonds were underwritten by UBS and stuffed with other Puerto Rico bonds into its own Puerto Rico closed-end bond funds and sold to its own unsuspecting clients. These funds aren’t traded; UBS sets the value.

And UBS, despite the well-known problems Puerto Rico has been having for years, wasn’t shy about loading up its clients up with these bonds, apparently, according to Reuters:

Many UBS brokers had misgivings about the funds even as UBS’ Puerto Rico chairman was pushing them to sell the bonds, according to a voice recording, reported by Reuters in February.

Information Clearing House

Alison Weir / If Americans Knew...

The Corbett Report

Centre for Research on Globalisation

Signs of the Times

Photojournalism:

BOYCOTT ISRAEL

BREAK THE GATEKEEPERS

ARE YOU A CITIZEN OR A SUBJECT?

The inability to grasp the pathology of our oligarchic rulers is one of our gravest faults. We have been blinded to the depravity of our ruling elite by the relentless propaganda of public relations firms that work on behalf of corporations and the rich.

We need to remember that, psychopaths and other personality disordered individuals really have no choice but to be what they are; they are like forces of nature. But normal human beings DO have a choice as to whether they will accept abuse or not. By accepting abuse, they give power to the psychopaths to abuse others so it is not just a matter of self-preservation; it is a matter of making sure that our children have a future. It seems that, in a world where the people cannot or will not, rise up against psychopathy in power, the Cosmos will do it for them, and take them out as well for their silence and their weakness. The bottom line is, nobody and no event is going to “save” anyone. It is only human beings, individually and collectively, who have the power to BE salvation.” – Laura Knight-Jadczyk

Plans for control of the evil forces that have been loosed in the world, attempts to compensate the evil- doing by good works or sympathy for the victims, efforts to safeguard the peace or to effect ideal solutions of all the material problems involved, can do little to change the nature of the situation. The real problem, namely, the question of what can be done for civilization in face of the nonhuman forces arising from the collective unconscious in thousands or rather millions of individual persons, will remain untouched. However, if only one human being has met and solved the problem in himself, he will be a living demonstration of a solution. Such an individual carries with him the germ of a renaissance of the spiritual values of mankind.

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